Personal Injury Firm
Last fall, a St. Louis Asian fusion restaurant owner filed a lawsuit against DoorDash in the U.S. District Court for the Northern District of California after the food delivery company posted a landing page on its app for the restaurant, even though they had no existing relationship nor consent to do so.
And that’s the basis of a potential class action lawsuit filed by Lona’s Lil Eats, the St. Louis restaurant in question. The suit reportedly alleges that DoorDash sets up fake landing pages for restaurants in an effort to steer customers to preferred restaurants on their app. The restaurant alleges that when a customer clicked the landing page, they were able to see a complete menu and proceed as if an order could be placed. In the end, though, the customer was shown one of two messages: that Lona’s was closed or that it was “too far away” for delivery, even when the customer was standing within 200 feet of the location.
The lawyers representing Lona’s are arguing that DoorDash is impacting their client’s business, as well as that of other potential members of the class, given that the company takes up to a 30% commission on each order.
The suit states: “DoorDash is publishing false and deceptive information about the ability to get food from Lona’s as a means of punishing it for not partnering with it, and/or pressuring it to partner with it and to redirect would-be Lona’s business to its partner restaurants. Defendant’s conduct has an obvious, significant and unfair impact upon the competitive landscape within the restaurant industry and results in damage to plaintiff and members of the class.”
In late Jan. 2021, U.S. Magistrate Judge Thomas Hixson for the San Francisco-based District Court denied DoorDash’s motion to dismiss, allowing the suit to move forward. The judge ordered DoorDash to file its answer to the amended complaint within 14 days.
In the original complaint, Lona’s attorneys said that DoorDash engaged in “unfair, deceptive and anticompetitive practice regarding the manner in which it displays information about businesses with whom it does not have an agreement to provide service.” It also stated that DoorDash “has engaged in a pattern of behavior whereby customers are deceptively steered away from restaurants with whom DoorDash does not have a relationship by DoorDash’s practice of affirmatively representing to consumers that those restaurants are closed, cannot deliver to them or are not accepting orders at the time.”
The attorneys are asking for a jury trial with class action status for similarly impacted businesses, seeking damages and injunctive relief for false advertising in violation of the Lanham Act, of California’s False Advertising law (FAL) and of California’s unfair competition law (UCL).
Reportedly, nearly 58% of all restaurant delivery sales in the U.S. are being made on these apps, and it’s expected to reach 70% by 2022. DoorDash is the country’s industry leader with 50% market share.
In Dec. 2020, we reported on a story about customers on DoorDash being able to order from “non-partner” merchants, which are restaurants that do not have agreements with the delivery app. Assemblymember Lorena Gonzalez (D-San Diego) authored AB 2149, called the Fair Food Delivery Act, which would require the food delivery services to only list a restaurant on their platform with permission from the restaurant owner and to share certain information about who is ordering. The San Diego assembly member also authored AB5. The Fair Food Delivery Act of 2020, which was signed into law in Sep. and took effect on Jan. 1.
